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IRON ORE
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MODERN MINING
August 2015
O
ne effect of the fall in the iron
ore price is that activity in what
used to be one of the most prom-
ising iron ore destinations in Af-
rica – the West Central African
region taking in Cameroon, Gabon and the Re-
public of Congo (ROC) – has tailed off sharply.
The region was once touted as the next iron
ore frontier. No more. Exarro has taken a R5,8
billion write down on its
Mayoko
project in
ROC while ASX-listed Equatorial Resources
announced earlier this month (August) that
it had entered into a conditional agreement
with Midas Global, a subsidiary of Interalloys
Trading, for the sale of its nearby
Mayoko-
Moussondji
iron ore project. Also under
development in ROC is the plus US$2 billion
Zanaga
project (a JV between Glencore and
AIM-listed Zanaga Iron Ore), which is at an
advanced stage with a feasibility study and
mining licence in place. Zanaga said at the
end of last year that – in the light of changing
iron ore market conditions – the JV planned
to reduce the cost base of the project during
2015 while continuing to advance key prepa-
ratory work.
Sundance Resources, an ASX-listed com-
pany, is continuing with its
Mbalam-Nabeba
project which straddles the border between
ROC and Cameroon but activity on the ground
seems to have waned, with Sundance now
mainly focused on achieving funding of the
mine infrastructure. Nevertheless, it says it is
moving ahead with “a high level of confidence”.
Interestingly, John Welborn, Equatorial’s
MD for the past several years, has now stepped
down from that role (although he remains
a Non-executive Director of the company),
and has recently surfaced as CEO of another
Australian miner with interests in Africa,
Resolute Mining, which owns the Syama
gold mine in Mali and the Bibiani gold mine
in Ghana. As MD of Equatorial, he was obvi-
ously a cheer-leader for the iron ore market but
has now changed his tone markedly and was
recently quoted in the Australian media as say-
ing that “I can’t be more delighted to move from
a commodity that’s measured by the tonne, and
increasingly worth nothing, to one that has
always been valuable and has been measured
by the ounce.”
Further south, in South Africa itself, Kumba
Iron Ore’s recently announced interim results
for the six months to 30 June, give some idea
of the challenges facing the iron ore mining
sector. Although the company’s
Sishen
and
Kolomela
mines in the Northern Cape contin-
ued to perform strongly at an operational level
and total sales volumes increased by 16 %
over the equivalent period of 2014, headline
earnings were 61 % lower at R2,5 billion. To
handle the tough market conditions, Kumba
Price crash
leaves Africa’s iron ore
The long slide in the iron ore price – which peaked at
US$191/tonne in early 2011 – has left the iron ore mining
scene in Africa in tatters. Just two years ago, there were
projects speeding ahead all over the continent. Nowmost
projects have been slowed or deferred and some new
mines which were launched with great fanfare several
years back – Tonkolili and Marampa in Sierra Leone – are
no longer producing (although Shandong is reportedly
planning a resumption of operations at Tonkolili).
Modern
Mining’s
Arthur Tassell gives a round-up of some of the
latest developments.